CA Code & Ethics

Question 1

The California Insurance Code

Answer 1

provides for the formation of a Department of Insurance, which has broad regulatory powers to enforce the insurance law

• regulates capitalization and reserve requirements
• established by the state legislature

Question 2

The Insurance Commissioner

Answer 2

In charge of the Insurance Department, elected to office by the people, place, and manner as the Governor

Elected to a four-year term

Question 3

The California Code of Regulations (CCR) Title 10, Chapter 5

Answer 3

Regulations include standards for approval and disapproval of names of insurance producers, continuing education requirements, record keeping

Question 4

Penalties for transacting insurance business in Cali without license or certificate of authority

Answer 4

Imprisonment in state prison or county jail for up to one year

• Fine of up to $100k
• Both imprisonment and fine

Question 5

Insurance Solicitor

Answer 5

A natural person employed to aid an insurance agent or insurance broker in transacting insurance other than life insurance

Question 6

Insurance Agent

Answer 6

A personal authorized by and on behalf of an insurer to transact all classes of insurance other than life insurance

Question 7

Third-Party Administrator

Answer 7

Acts a s a liaison between the insurer and the employer in matters such as certifying eligibility, preparing reports required by the state and processing claims

Question 8

Life and Health Agent

Answer 8

A person authorized by and on behalf of a life, or life and disability insurer to transact life or disability insurance or both

Question 9

Insurance broker

Answer 9

A person who for compensation and on behalf of another person transacts insurance other than life insurance with, but not on behalf of an insurer

Question 10

If an agent has not kept any records, the Commissioner may require them to establish records within how many days

Answer 10

60

Question 11

Surplus Lines (SL) Broker

Answer 11

is an insurance professional who negotiates coverage on your behalf from an excess and surplus lines (E&S) insurer. E&S insurers specialize in risks that standard insurers won’t cover. They are nonadmitted, meaning they operate in states in which they aren’t licensed.

Question 12

Agent who sells LTC must have how many hours of specific training

Answer 12

8 hours of specific training in that area is required and four hours of annual education is required

Question 13

Pretext Interview

Answer 13

An interview in which the party gathering information refuses to reveal their identity, pretends to be someone else, misrepresents the true purpose of the interview or pretends to represent someone who is not in fact represented.

• is Illegal except when an insurer is investigating fraud or material misrepresentation

Question 14

California Insurance Code 700

Answer 14

prohibits the tying of an insurance transaction to a loan

Question 15

Penalty for an unfair claims settlement practice

Answer 15

5k per act and 10k if the act is willful

Question 16

Perjury

Answer 16

the offense of willfully telling an untruth in a court after having taken an oath or affirmation

Question 17

Alien Insurer

Answer 17

is an insurance provider offering coverage in a country other than the company’s home country. The relationship between the country of incorporated and the location where it sells a given policy defines if an insurer is alien.

Question 18

Special Investigative Unit

Answer 18

In insurance companies - they have to have a special division dedicated to the prevention and detection of fraud

Question 19

Certificate of Authority

Answer 19

An admitted insurer must have a certificate of authority before transacting insurance in the state of California

Question 20

Demutualization

Answer 20

process by which a mutual insurer becomes a stock insurer

is a process by which a private, member-owned company, such as a co-op, or a mutual life insurance company, legally changes its structure, in order to become a public-traded company owned by shareholders

Question 21

Conservation

Answer 21

when the commissioner takes control of an impaired insurer affairs in order to improve its financial condition

Question 22

Mutual Companies are sometimes referred to as

Answer 22

Participating companies because the policy owners participate in dividends

Question 23

An insurer chartered under the laws of New York and headquartered in Chicago would be considered which type of insurer in California

Answer 23

Foreign - an insurance company headquartered in another state is a foreign company

Question 24

Monetary penalty for unfair discrimination

Answer 24

$1k to 5k plus court costs

Question 25

Statute of Limitations

Answer 25

a law prescribing the period within which certain types of causes of action must be brought. … Actions for declaratory judgment in an insurance coverage matter are generally held to be governed by the statute of limitations for suits on written contracts, which vary in length from state to state.

Question 26

Acting without a producer license is

Answer 26

a misdemeanor and punishable by a $50k fine and or 1 year in jail

Question 27

Life agents must maintain records of client transactions for a minimum of

Answer 27

5 years